Major parcel carriers turn in strong Cyber Week on-time performance levels, reports ShipMatrix

Data issued this week by ShipMatrix, a subsidiary of Pittsburgh-based SJ Consulting, highlighted strong on-time performance (OTP) for the three United States-based domestic parcel carriers—FedEx, UPS, and the United States Postal Service (USPS)—for Cyber Week.

ShipMatrix observed that based on its data of millions of parcels shipped during Cyber Week pointed to online orders being delivered “at levels better than in the last several years,” with the respective OTPs for FedEx, UPS, and the USPS, coming in at 97.8%, 98.0%, and 95.2%, respectively.

The firm looked at the difference in parcel market capacity, at 120 million parcels per day, compared with 2023 Peak Season demand estimated at 82 million parcels per day, whereas 2022 Peak Season capacity was more than 90 million parcels per day. This excess capacity, said ShipMatrix, “should allow these carriers to maintain such high service for the rest of the season.”

As for Amazon, ShipMatrix said that online orders for consumers over the course of Peak Season will be handled by uniformed company employees, as opposed to Amazon using both UPS and the USPS for millions of its parcels in previous Peak Seasons.

What’s more, ShipMatrix noted that the national parcel carriers have “relaxed” Peak Season transit times, adding an extra day to various lanes.

For example, it cited how parcels shipped via FedEx or UPS from New York City to Chicago, which used to have a two-day transit time, now, instead, have a three-day transit time. Or parcels shipped via UPS from Massachusetts to Savannah, Ga., leverage four-day transit times instead of three-day transit times, or parcels shipped via FedEx from Los Angeles to New Jersey have a five-day transit time rather than the previous four-day transit time.

The firm added that with more than 90% of Peak Season shopping completed before Christmas Eve, orders will be delivered in time, save for customers procrastinating and waiting to place an order until the day before.

ShipMatrix President Satish Jindel said in an e-mail to members of the media that given the huge amount of excess capacity in the parcel industry, there should be no surprise that all the carriers performed at the highest levels in last many years.

“While my prior experience is that good performance by the parcel carriers does not get media attention, with very little good news these days due to all the global conflicts, maybe it will be different this year,” he added.

When asked what drove down 2023 Peak Season volume estimated at 82 million parcels per day, compared to the 2022 Peak Season capacity was more than 90 million parcels per day, Jindel told LM that what reduced that figure was a diversion of consumer spending from goods to entertainment and services.

“I call that the ‘Swiftie’ phenomenon,” said Jindel. “Taylor Swift singlehandedly [taken] $5 billion worth of consumer spending on goods that has gone to her movies, as well as ticket, hotels, and airlines for her concerts.”

On a non ‘Swiftie’-related note, he said another factor is that people are shopping more in stores now than in recent years.

“How do I know that? My customers shipped to stores and to consumers, and the volume going to stores is up,” said Jindel. “The other way I know it is because anytime I am traveling and go by a mall…. often there is no parking, as people are there to shop. There is more shopping happening in the stores. Retail sales will still look good, but that does not mean it is converting into parcels going to peoples’ homes.”

As for the transit time extensions, Jindel said UPS was the initial company to do so, around four years ago, adding that what this does is allow a parcel delivery provider to better manage operations and manage costs, as costs rise during peak times. And from a consumer point of view, should an online order be made, for example on December 10, whether it arrives three, four, or five days later is not germane, as long as the order arrives before Christmas Eve.

“It makes sense for these companies to do this,” he said. “Consumers really don’t care if a day is added. Adding an extra day, for your lanes, helps to make sure these companies are being measured correctly.”